Some welcome news for European Central Bank President Mario Draghi arrived today in the form of surprisingly robust growth data, in particular for France and Spain. While the ECB asset-purchase program has had a profound impact on financial assets, concerns about the ability of monetary policy to foster organic growth have weighed on investors minds in recent months. Gross-domestic-product data from France showed positive momentum with a headline expansion of 0.5 percent on an annualized basis, an improvement from the final quarter of 2015 and better than consensus forecasts. Separately, Spanish GDP registered at 0.8 percent for the first three months of 2016. According to the full report by Eurostat, aggregate headline GDP for the common-currency region expanded by an annualized 0.6 percent for the period stronger than forecast, and a decline in the headline unemployment rate for March to 10.2 percent versus a prior 10.4. It was not all good news however, with consumer-inflation index levels for the Eurozone contracting by 0.2 percent year-over-year for April. For investors the question now is whether improving fundamentals will cause ECB policy makers to chart a more hawkish course.
UPS faces pension charges. United Parcel Service warned investors on Friday that the company may assume as much as $3.8 billion in additional pension obligations depending on a Treasury Department ruling on past obligations. Separately, the global delivery firm reported earnings of $1.27 per share for the first quarter of the year, besting consensus analysts estimates of $1.22.
PBOC raises currency band. The Peoples Bank of China, the countrys central bank, raised its yuan/dollar fixing level on Friday by the largest measure since the bank abandoned a hard currency peg in 2005. In response to a sharp decline in the dollar reference rate, the fixing level was increased by 0.6 percent to 6.46 per dollar. The move comes after weak GDP data sent the dollar lower versus major currencies on Thursday.
Atlantic City teeters. As the New Jersey shore casino city faces the increasingly likely prospect of insolvency, multiple media outlets are reporting that a modest interest payment due on Sunday may not be paid. Atlantic City Mayor Don Guardian has publicly acknowledged that it will be impossible for the municipality to meet current obligations without a debt restructuring.
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